Chesapeake Energy Corporation (CHK), SandRidge Energy Inc. (SD): Where Are the 3 Stooges Now?

Downside? The drama over CEO Tom Ward and his family’s dealings in the same Mississippian Lime play. Concern persists Ward may be disproportionately concerned about his family’s holdings than his company’s holdings. Activist investors believe the Ward family’s acreage being immediately adjacent to SandRidge Energy Inc. (NYSE:SD)’s assets is no coincidence and have worked to have Ward removed. These investors may get their wish this summer, but until then, the uncertainly likely will weigh on the stock.

Final Foolish Thoughts

The arrival of Marissa Myers as Yahoo! Inc. (NASDAQ:YHOO)’s new CEO precipitated a 55% increase in the stock’s price. Will Lawler’s arrival at Chesapeake do the same for his company? The 5% increase in five days is a nice start and growing oil production and slowly rising natural gas prices will help the company’s growing earnings. Similarly, improving production and built out infrastructure in the Mississippian Lime will improve SandRidge’s fortunes going forward. Once the Ward drama resolves, I suspect investors will look favorably on SandRidge’s operations and prospects. Kodiak remains a stooge. Earnings should rise with revenues and with Kodiak, it’s not happening. Until Kodiak converts more of its revenues to earnings, I’d follow the lead of its insiders and stay away.

Robert Zimmerman has the following options: Long Jan 2014 $22 Calls on Chesapeake Energy. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy.

The article Where Are the 3 Stooges Now? originally appeared on Fool.com and is written by Robert Zimmerman.

Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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